Victory march

New Delhi, Feb. 21: The government has fixed the floor price for the sale of shares of computer firm CMC Ltd at Rs 475 and Rs 620 for divesting its equity in IBP.

After the IPCL public offer, which opened yesterday and is heavily oversubscribed, these two public sector undertakings (PSUs) are next in line where the government is selling its residual equity and where retail investors would get a 5 per cent discount over other investors.

IBP’s public issue of 57.58 lakh shares would hit the market on February 23 and close on March 1, while bids for CMC would open on February 23 and close on February 28.

Disinvestment secretary Dhirendra Singh said, “The government has decided to go for a fixed floor price, instead of a price band.”

“We have decided to follow the same principle for discount, as in the case of IPCL,” he added.

CMC has announced an offer of 3,976,374 equity shares of Rs 10 each constituting 26.25 per cent of the fully-diluted equity of the company’s paid-up capital. The government had divested a majority stake in CMC to the Tata group in 2002.

Under the book-building method, up to 50 per cent of the offer will be allocated on discretionary basis to qualified institutional buyers. At least 25 per cent of the offer will be made available to non-institutional bidders and the same percentage to retail bidders.

The government will offload a 26 per cent stake in IBP through the forthcoming public offering. Earlier, state-owned Indian Oil had acquired a strategic stake in IBP after buying the government’s stake.

Indian Oil and the Tatas — the two strategic partners in IBP and CMC respectively — are not being offered additional shares during the residual stake sale. The bidding for the residual equity in CMC and IBP on February 23 will be followed by a public offer for the sale of 20 per cent equity in State Trading Corporation. After these, the bids for ONGC will be invited on March 5 and for Gail on February 27.